LifeLock's Fraud-Alert Service Banned Forever in Settlement With Experian
|Image: Martha Strachan|
Under a lawsuit settlement with Experian, a major credit bureau, LifeLock can no longer place a fraud alert on its customers credit bureau accounts. The alerts, which work like electronic red flags in a vast database of credit users, halt someone from opening a new line of credit in your name until you verbally authorize it. But as LifeLock found out, federal law only allows individuals to place fraud alerts on their accounts -- they can't pay a company to do it for them.
It figures that LifeLock's main service would turn out to be illegal -- the company's founder, Robert J. Maynard Jr., claims to have come up with the idea in jail. LifeLock used its founders tale of being thrown in jail by mistake as an example of how bad identity theft could be.
Maynard Jr. claimed he'd been picked up after cops confused him
with a suspected murderer who'd stolen his identity. As New Times revealed in its 2007 article, What Happened in Vegas, the story turned out to be a cover for Maynard Jr.'s embarrassing arrest for a casino debt.
Maynard Jr. left LifeLock, apparently under pressure from its other officers, and started a Hawaiian adventure business. A follow-up article in New Times took apart the anti-identity-theft industry in general.
After our articles, though, hundreds of thousands of people across the country signed up for LifeLock. The company utilized tens of millions of dollars of its investors' money for effective ads featuring its CEO, Todd Davis, who famously revealed his Social Security Number to the
world (and was promptly ripped off by a number of identity thieves).
Knowing their jig was up, LifeLock began offering a new service to its customers this year. Time will tell if the company can maintain its momentum.